Louisiana Energy Conference June 10, Nasdaq: ZAZA

Transcription

1 Louisiana Energy Conference June 10, 2015 Nasdaq: ZAZA

2 Investor Notices Forward Looking Statements. This presentation and other written or oral statements made by or on behalf of ZaZa Energy Corporation (the Company ) contain forwardlooking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of All statements, other than statements of historical fact, including without limitation, statements and projections regarding the Company s future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production and costs, statements regarding future commodity prices and statements regarding the plans and objectives of the Company s management for future operations, are forward looking statements. The Company s forward looking statements are typically preceded by, followed by or include words such as will, may, could, would, should, likely, believe, expect, anticipate, plan, estimate, target, goal, project, plan, intend and similar words or expressions. The Company s forward looking statements are not guarantees of future performance and are only predictions and statements of the Company s beliefs based on assumptions that may prove to be inaccurate. Forward looking statements involve known, unknown or currently unforeseen risks and uncertainties that may be outside of the Company s control and may cause the Company s actual results and future developments to differ materially from those projected in, and contemplated by, such forward looking statements. Risks, uncertainties and other factors that could cause the Company s actual results to materially differ from the expectations reflected in the Company s forward looking statements include, without limitation, our registered public accounting firm for the year ended December 31, 2014 expressing doubt about our ability to continue as a going concern and our ability to maintain sufficient liquidity and continue as a going concern; our ability to consummate transactions to refinance our 10.00% Senior Secured Notes and to exchange our 9.00% Convertible Senior Notes due 2017 and our 8.00 Subordinated Notes due 2017 for equity; requirements to repurchase our 10.00% Senior Secured Notes due 2017 or our 9.00% Convertible Senior Notes due 2017; our substantial level of indebtedness; the impact of our current financial condition on our business operations and prospects; fluctuations in the prices for, and demand for, oil, natural gas and natural gas liquids; our ability to raise necessary capital in the future; problems with our joint ventures or joint venture partners; exploratory risks associated with new or emerging oil and gas formations; risks associated with drilling and operating wells; inaccuracies and limitations inherent in estimates of oil and gas reserves; and any other factors or risks listed in the reports and other filings that the Company has filed and may file with the Securities and Exchange Commission (the SEC ). Any forward looking statements made by the Company in this presentation and in other written and oral statements are based only on information currently available to the Company and speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any of its forward looking statements, whether as a result of new information, future developments or otherwise. Market & Industry Data. The market and industry data contained in this presentation and other written or oral statements made by or on behalf of the Company are based on management s own estimates, internal company research, surveys and studies conducted by third parties and industry and general publications, and in each case, are believed by management to be reasonable estimates. The Company has not independently verified market and industry data from third party sources. This data is subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market or industry data. As a result, you should be aware that market and industry data set forth herein, and estimates and beliefs based on such data, may not be reliable. Cautionary Note. The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC s definitions for such terms (and price and cost sensitivities for such reserves), and prohibits the disclosure of resources that do not constitute such reserves. This presentation and other written or oral statements made by or on behalf of the Company may contain certain terms, such as resource potential and exploration target size, that are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. SEC guidelines strictly prohibit the Company from including such estimates in filings with the SEC. Investors are encouraged to consider closely the disclosure in our reports and other filings that the Company has filed and may file with the SEC, all of which are available on our website at or by written request to ZaZa Energy Corporation, Attn. Investor Relations, 1301 McKinney Street, Suite 2800, Houston, Texas Nasdaq: ZAZA 2

3 Company Snapshot AN EMERGING EAGLE FORD EAST PRODUCER Overview ZaZa Energy Corporation ( ZaZa or the Company ) is an E&P company focused primarily in the Eagle Ford East trend in East Texas and the Eagle Ford trend in South Texas ~41,400 net acres (6,925 HBP) in the Eagle Ford East and Lower Cretaceous windows Proved reserves of 1.0 MMBoe and proved PV 10 of $8.2 million Significant undeveloped acreage and Proved Undeveloped reserves for development 1Q15 net production (Boe/d): ~ capex plan includes 6 8vertical Buda Rose stack and frac wells in Walker county Key Statistics Stock Price (5/29/2015) $ Week High / Low $10.60 $1.22 Common Shares Outstanding (4/30/2015) 13.3 MM Public Float 5.3MM Average Daily Volume (3 Month) 95,976 Market Capitalization $18.2 MM Insider & Employee Holdings 57% Fiscal Year End December 31 Headquarters Houston, TX Nasdaq Ticker ZAZA Nasdaq: ZAZA 3

4 Asset Overview PREMIER ACREAGE POSITION Acreage Overview Asset Map Total Total Developed (HBP) Undeveloped Region Gross Acres Net Acres Net Acres Net Acres ZaZa EOG East Texas 139,288 31,601 6,925 24,676 ZaZa East Texas Expansion 9,751 9,751 9,751 ZaZa Sabine (Sweethome) 3, ZaZa South Texas Eagle Ford 5,350 2,771 1,398 1,373 Total 157,762 44,985 8,860 36,125 Acreage Status Region Status Commentary ZaZa EOG East Texas ~20% HBP Majority in primary term (3 + 2) 2015expiration $3.6MM net to ZaZa 2016expiration $3.6MMnet to ZaZa 2017expiration $1.5MMnet to ZaZa HBP with 43wells ZaZa East Texas Expansion Leased 2H 2014 Initial primary term (4 + 2) ZaZa Sabine (Sweethome) ~60% HBP HBP with 3 wells ZaZa South Texas Eagle Ford ~50% HBP HBP with 2wells County Legend Houston, Leon, Trinity Dewitt, Lavaca McMullen, Lavaca ZaZa Headquarters Nasdaq: ZAZA 4

5 Reserves Overview SPRINGING VALUE W/ LIQUIDITY CREATES NEAR & LONG TERM UPSIDE Reserve Summary 1 Oil (MBbls) NGL (MBbls) Gas (MMcf) Total (MBoe) %Liquids PV 10 ($ MM) Proved Developed Producing , % $7.3 Proved Developed Non Producing % Proved Undeveloped % 0.9 Total , % $8.2 Proved Undeveloped with additional liquidity 2 12, , , , % Pro Forma Total 12, , , , % $ As of December 31, 2014 a nd prepared by Ryder Scott; Oil $63.74/Bbl, NGLs $33.88/Bbl, Ga s $3.75/Mcf 2 As of June 1, 2015 and based on internal estimates. Includes value from 108 vertical Buda Rose wells (8 wells planned for 2015 & 100 PUD locations). PV 10 value is an average based on different partner elections and drilling costs. Pricing based on Oil $66.25/Bbl, NGLs $18.00/Bbl, Gas $3.20/Mcf Third party engineering firm to run a mid year reserve report as of June 30, 2015 (Current reserves do not give $300MM of springing proved reserves value potential) Nasdaq: ZAZA 5

6 Vertical versus Horizontal Development Strategy POSITIONED FOR VERTICAL DRILLING PROGRAM SUCCESS Our Corporate Strategy Focuses on Unconventional Development of Conventional Reserves Benefits of Vertical Stack and Frac Program HBP up to 704 acre units Lower execution and operational risks Minimizes drilling & completion costs (~$3MM AFE) Highly economic in a low price commodity environment Drilling through Glen Rose formation (~13,000 ) to hold all depths Multi stacked pay potential (comingled 7+ stage stack and frac completion) Benefits Benefits & Considerations of Horizontal Program Larger EUR Potentially higher returns Considerations Drilling does not hold all depths More complicated and higher drilling & completion costs (~$8MM AFE) Higher mechanical failure risk Nasdaq: ZAZA 6

7 East Texas Development Targets INITIATING BUDA ROSE VERTICAL WELL DRILLING PROGRAM Vertical Options G R [ G A P I ] ( C T R ) R T 9 0 [ o h m m ] N P H I [ C F C F ] D P H I [ % ] T O T A L _ G A S E S Horizontal Options Austin Chalk Woodbine 1,000 Dexter Sands Lower Eagle Ford Buda Georgetown 2,200 Nasdaq: ZAZA Data based on Burk Royalty Co. LTD Etheridge # , Houston Co., TX Kiamichi Goodland/Edwards Paluxy Glen Rose A Glen Rose B Glen Rose C Glen Rose D Glen Rose E Glen Rose G Planned Development Vertical Lower Cretaceous ( Buda Rose ) Wells Comingled 7+ stage Stack and Frac completion Oil Volitile Oil/Wet Gas Horizontal Wells multi stage completion EOG has permitted three well pad targets: Horizontal Buda Horizontal Kiamichi Horizontal Goodland

8 Potential Well Locations & Illustrative Well Economics SIGNIFICANT DRILLING AND DEVELOPMENT POTENTIAL Nasdaq: ZAZA Potential Well Locations Gross Spacing Area Locations (Acres) Direction Counties Buda Rose Eagle Ford Buda Kiamichi Goodland Gross Monthly Production (Boe) 14,000 12,000 10,000 8,000 6,000 4,000 2, Vertical Horizontal Horizontal Horizontal Horizontal Vertical Buda Rose Type Curve Month Vertical Buda Rose Well Economics $3.6MM D&C Scenario $3.0MM D&C Scenario Vertical Buda Rose Wells 1 Vertical Buda Rose Wells 1 Wellhead Volumes 100% WI 25% WI 100% WI 25% WI Gas (MMcf) Oil (MBbls) 1, , , , Total (MBoe) Gas Shrink (%) 20.0% 20.0% 20.0% 20.0% NGL Yield (Bbls/MMcf) Net Sales Volumes (EUR) 2 Gas (MMcf) Oil (MBbls) NGL (MBbls) Total (MBoe) Gross Well Cost ($M) $3,600 $3,600 $3,000 $3,000 Operating Expenses Total Opex /Well/Month($) $6,072 $6,072 $6,072 $6,072 Pricing Gas ($ / Mcf) 3 $3.20 $3.20 $3.20 $3.20 Oil ($ / Bbl) 4 $66.25 $66.25 $66.25 $66.25 NGL ($/ Bbl) 5 $18.00 $18.00 $18.00 $18.00 Interest Net Revenue Interest (%) 75.0% 18.8% 75.0% 18.8% Taxes Severance, Oil (%) 4.6% 4.6% 4.6% 4.6% Severance, Gas and NGL (%) 7.5% 7.5% 7.5% 7.5% Ad Valorem (%) 2.5% 2.5% 2.5% 2.5% Single Well IRR 62.1% 62.1% 83.0% 83.0% Single Well PV 10 ($M) $5,432 $1,375 $5,670 $1,525 Single Well Discounted ROI 2.5x 2.5x 2.9x 3.0x 1 Type curve based on 9 Buda Rose wells that ZaZa participated in area 2 EUR adjusted for Net Revenue Interest 3 $3.50 Mcf Henry Hub and $0.30 Mcf differential 4 $60.00 Bbl WTI and +$6.25 Bbl differential 5 NGL pricing based on 30% of WTI oil 16

9 Eagle Ford East Competitors PREMIER OFFSET PRODUCERS Nasdaq: ZAZA 20